Posted by JonAn interesting discussion yesterday with a friend who’s taken on a new role heading proposal management for a rather diverse organisation. To what extent, she wondered, do proposal managers earn commission if they help to win the deal, and does that vary by sector?

It’s always been a regret for me that I didn’t accept a win bonus when I ran the bid centre at Compaq years ago. Given my team then helped to secure $1.5bn of business in a very short time, I’d have been rich had I been pocketing a share of the spoils. But the purist in me prevails: the proposal is a key element of the win, but far from the only factor. Moreover, if you put proposal managers on commission, it can drive the wrong behaviours: rivalry between proposal centre members (”why is s/he always given the good deals”); lack of mutual support on bids (”I won’t get any money, so why should I help”); sales people feeling threatened (”they’re stealing from my pot”).

Then again, we do deserve to be well-rewarded – and helping our sales colleagues to win is, after all, what we’re here to do. My personal preference is that there’s a hefty bonus scheme in place, in which the amount and percentage won is a major factor. Barbara Esmedina’s excellent survey tends to validate the assumption that win bonuses are rare: only 16% of respondents receive a “bonus tied to winning business (specific to RFP/sales activity”), whereas 65% get bonuses linked to performance / merit. I’m curious to know what others think – and what works well in organisations around the world. Do let us have your comments!

Performance/merit does seem to make the most sense for bonus compensation as proposal teams can influence the bid/no-bid process but typically it is the sales team that makes the final decision to pursue. Plus, pricing is a strong selection factor (depsite our best efforts to show “value”) and most proposal teams don’t have control over that piece either.

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Herve Schyns

3/25/2016 03:23:04 pm

Very interested in reading future comments.

I’m actually investigating how to incentivate proposal managers in our company.
I’m in complete agreement with John’s remarks and building on it, I’m looking to setting a win bonus scheme as a percentage of opportunity value.

To mitigate adversed individual effects, I envisioned mutualizing the collected bonuses and a the end of a specific period (quarter, half year, year…) to redistribute the global pot across the team following a predefined key (either based on salary, or seniority,or a combination of several parameters or anyother one…)

In this case, you would sustain motivation and solidarity of a team of proposal professionnals.

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Sharon Mahoney

3/25/2016 03:23:17 pm

I have worked in 100% commission sales positions and in salaried positions (various industries). So, I can understand true sales efforts/pay for performance as well as G&A or Overhead positions. Unless a Proposal Manager/Team are willing to take a hit on the lost proposals, I don’t see a huge push for win bonuses. However, it would be nice, especially if a team has a high win rate. I look forward to seeing feedback from your other readers.

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Robin

3/25/2016 03:23:29 pm

I like the idea of an incentive bonus because I think [some] people do better work when they have some skin in the game. If it motivates people to be more proactive, more detailed, more emotionally attached to the outcome, I’m all about it. In terms of structure, that’s always the difficult part. At my last company, I was able to convince leadership to pay out a flat rate bonus on wins. It was a rather small amount but the team liked it and it didn’t impact the sales person’s commission. But, the reason I requested it in the first place was because my people were underpaid and I was unable to get them up to industry minimum standards through a hefty raise. The bonuses were my Plan B.